Act of Parliament · As enacted
Prevention of Money Laundering (Amendment) Act 2026
Official English translation. Where it differs from the Sinhala or Tamil text, the Act itself says which text prevails.
Official translationFrom Department of Government Printing, unchanged
s 1Short title
This Act may be cited as the Prevention of Money
Laundering (Amendment) Act, No. 16 of 2026.
s 2Amendment of section 2 of Act, No.5 of 2006
Section 2 of the Prevention of Money Laundering
Act, No. 5 of 2006 (in this Act referred to as the “principal enactment”) is hereby amended by the repeal of paragraph (c) of that section and the substitution therefor, of the following paragraphs: -
“(c)
an act which constitutes an offence under this
Act, which is committed in Sri Lanka;
an act committed within any jurisdiction outside Sri Lanka which would either constitute an offence corresponding to the offence of money laundering in that jurisdiction or which would, if committed in Sri Lanka, amount to the offence of money laundering or an unlawful activity within the meaning of this Act;
a person who commits an act referred to in paragraph (d) within any jurisdiction outside
Sri Lanka; and
an act which constitutes an offence under this Act committed either wholly or partly in
Sri Lanka or outside Sri Lanka.”.
s 3Amendment of section 3 of the principal enactment
Section 3 of the principal enactment is hereby amended as follows: -
in subsection (1) of that section –
by the substitution for the words “from the proceeds of any unlawful activity”, of the words
“from the proceeds of any unlawful activity or any conversion of such property”, wherever those words appear in that subsection;
in paragraph (b) of that subsection-
by the substitution for the words
“receives, possesses, conceals, disposes of,”, of the words “uses, purchases, receives, possesses, conceals, disposes of, transfers,” and
by the substitution for the words
“from the proceeds of any unlawful activity,”, of the words “from the proceeds of any unlawful activity or any conversion of such property;”;
by the addition immediately after paragraph (b) of that subsection, of the following new paragraph: -
“(c) acquires a beneficial ownership of any property which is derived or realised, directly or indirectly, from any unlawful activity or from the proceeds of any unlawful activity or any conversion of such property,”;
and
by the substitution for the words “for a period of not less than five years and”, of the words “for a period”;
in subsection (2) of that section, by the substitution for the words “aids or abets, the commission of”, of the words “aids or abets, or facilitates or counsels others in, the commission of”; and
by the repeal of subsection (3) of that section.
s 4Insertion of new section 3a in the principal enactment
The following new section is hereby inserted immediately after section 3 of the principal enactment and shall have effect as section 3a of that enactment: -
3a. For the avoidance of doubt, it is hereby declared that –
a conviction for the commission of the unlawful activity shall not be necessary for the proof of the offence of money laundering; and
the provisions of this Act shall not preclude any person from being charged with, or convicted of, an unlawful activity in addition to being charged with, or convicted of, the offence of money laundering.”.
s 5Amendment of section 4 of the principal enactment
Section 4 of the principal enactment is hereby amended by the substitution for the words “shall be deemed”, of the words “shall be presumed,” and for the words “are the proceeds of any unlawful activity,”, of the words “are the proceeds of any unlawful activity or any conversion of such property,”.
“Avoidance of doubt.
s 6Amendment of section 5 of the principal enactment
Section 5 of the principal enactment is hereby amended in subsection (2) of that section, by the substitution for the words “a fine not exceeding fifty thousand rupees”, of the words “a fine not exceeding five hundred thousand rupees”.
s 7Amendment of section 6 of the principal enactment
Section 6 of the principal enactment is hereby amended by the substitution for the words “a fine not exceeding one hundred thousand rupees”, of the words “a fine not exceeding one million rupees”.
s 8Amendment of section 7 of the principal enactment
Section 7 of the principal enactment is hereby amended as follows: -
by the repeal of subsection (1) of that section and the substitution therefor, of the following subsection: -
“(1) A police officer not below the rank of an Assistant Superintendent of Police may, where there are reasonable grounds to believe that any person is involved in any activity relating to the offence of money laundering and it is necessary to prevent further acts being committed in relation to such offence or dissipation of property reasonably believed to be criminal property, issue an order prohibiting any transaction in relation to such property or any property of corresponding value of such property which may have been used or which may be intended to be used in connection with such offence (hereinafter referred to as a
“Freezing Order”).”;
by the repeal of subsection (2) of that section and the substitution therefor, of the following subsection: -
“(2) A Freezing Order issued under subsection (1) shall be served on or communicated to –
(i) any person who is in possession, occupation, or control of, or is enjoying any benefits from, the property which is subject to the
Freezing Order; or
any person who is believed to be having an interest in the property which is subject to the
Freezing Order; and
any other person or Institution who or which may be required to give effect to such Freezing Order.”;
in subsection (3) of that section, by the substitution for the words “for a period of seven days”, of the words “for a period of fourteen working days”; and
in subsection (4) of that section, by the substitution –
for the words “not exceeding one hundred thousand rupees”, of the words “not exceeding five million rupees”;
for the words “in such account, property or investment”, of the words “in such property”;
and
for the words “not exceeding one year”, of the words “not exceeding two years”.
s 9Amendment of section 8 of the principal enactment
Section 8 of the principal enactment is hereby amended as follows: -
in subsection (1) of that section, by the substitution for the words “seven days” wherever those words appear in that subsection, of the words “fourteen working days”;
in subsection (2) of that section –
in paragraph (b) of that subsection, by the substitution for the words “shall not exceed three months”, of the words “shall not exceed four months” and for the words “a period of two years”, of the words “a period of three years”; and
in the proviso to that subsection, by the substitution for the words “in respect of the account, property or investment which”, of the words “in respect of the property which”; and
by the repeal of subsection (3) of that section and the substitution therefor, of the following subsection: -
“(3) Where the High Court confirms a
Freezing Order under subsection (2), it shall cause a notice of such Freezing Order to be published in the Gazette or at least one newspaper circulating in the Sinhala, Tamil and English languages, in order to facilitate bona fide third parties to make an application to the Court in support of their claims to the property which is subject to the Freezing
Order.”.
s 10Replacement of section 9 of the principal enactment
Section 9 of the principal enactment is hereby repealed and the following section is substituted therefor: -
9. Any transaction shall not, except with the sanction of the Court as provided for in section 10, be effected in relation to any property subject to the Freezing Order while the
“Transactions in contravention of the Freezing
Order to be null and void.
Freezing Order is in force, and any transaction so effected shall be null and void:
Provided however, there shall be credited to any account forming part of such property or constituting such property itself, any receipts accrued to such account, if any.”.
s 11Replacement of section 10 of the principal enactment
Section 10 of the principal enactment is hereby repealed and the following section is substituted therefor: -
10. In confirming a Freezing Order made under section 7, if the High Court is of the opinion that such Order could damage legitimate business or other interests of any person affected thereby and that any essential transaction in relation to the property which is subject to such Freezing Order, may be legitimately carried out, the High Court may, on an application made in that behalf or on its own motion, make order –
sanctioning the carrying out of such transaction; or
sanctioning the carrying out of such transaction under the supervision of the Receiver or Special Manager who may be appointed, or the Proceeds of
Crime Management Authority that may be directed, as provided for in section 11.”.
s 12Replacement of section 11 of the principal enactment
Section 11 of the principal enactment is hereby repealed and the following section is substituted therefor: -
“High Court to sanction essential and legitimate transactions.
11. (1) Upon confirming a Freezing Order by the High Court under section 8, a police officer not below the rank of an Assistant
Superintendent of Police may apply to the High
Court for an order for the appointment of a
Receiver or Special Manager or for a direction on the Proceeds of Crime Management
Authority, as the case may be, in terms of
Part IV of the Proceed of Crime Act, No. 5 of 2025 for the purpose of protecting, preserving, managing or disposing of the property which is subject to the Freezing Order.
The High Court may, on an application made under subsection (1), or on its own motion, appoint a Receiver or Special Manager or direct the Proceeds of Crime Management
Authority, as the case may be, in terms of the provisions contained in Part IV of the
Proceeds of Crime Act, No. 5 of 2025 for the purpose of protecting, preserving, managing or disposing of the property which is subject to the Freezing Order.”.
s 13Amendment of section 12 of the principal enactment
Section 12 of the principal enactment is hereby amended as follows: -
by the repeal of subsection (1) of that section and the substitution therefor, of the following subsection: -
“(1) Any police officer not below the rank of an Assistant Superintendent of Police shall take possession of, and otherwise deal with, the property which is subject to a Freezing
Order, and the Court on application made by such police officer or any other police
“Appointment of a Receiver etc., upon confirming a Freezing
Order.
officer not below the rank of an Assistant
Superintendent of Police and for the purpose of ascertaining the ownership, possession, beneficial ownership or the person who is in control of such property which is subject to the
Freezing Order, may order—
that any document relevant to-
tracing, tracking, or locating;
identifying or quantifying;
establishing the ownership, possession, beneficial ownership, or control of; or
obtaining any other information pertaining to, such property, be delivered forthwith to such police officer; and
that any institution named in such order furnish to such police officer all documents and information obtained by such institution relating to or concerning the property which is subject to the Freezing Order or any information relating to business transactions conducted by such institution in connection with such property as the Court may direct.”;
and
by the repeal of subsection (3) of that section and the substitution therefor, of the following subsection: -
“(3) Upon ascertaining the ownership, possession, beneficial ownership or the person who is in control of any property which is subject to a Freezing Order, such police officer shall report the same to the
Court which made the order under subsection (1), along with all documents and information obtained, establishing and supporting such ownership, possession, beneficial ownership or control, as the case may be.”.
s 14Insertion of new section 12a in the principal enactment
The following new section is hereby inserted immediately after section 12 of the principal enactment and shall have effect as section 12a of that enactment: -
12a. Where, upon receipt of any document or information ordered to be delivered or furnished under subsection (1) of section 12, such police officer has reasonable grounds to believe that any other property-
is connected to the property which is subject to the Freezing Order issued under section 7; or
has been derived or realised from any unlawful activity and is connected to the property which is subject to the
Freezing Order, then such police officer shall issue a Freezing
Order in relation to such connected property in terms of the provisions of section 7.”.
s 15Amendment of section 13 of the principal enactment
Section 13 of the principal enactment is hereby amended as follows: -
“Any other property connected with the property, to be subjected to a Freezing
Order.
by the repeal of subsection (1) of that section and the substitution therefor, of the following subsection: -
“(1) Where a person is convicted of an offence under section 3, the Court shall, subject to the provisions of subsection (2), order that-
the criminal property which is owned or possessed by, or under the control of, the convicted person or any other person;
the criminal property in which the convicted person or any other person has beneficial ownership; or
if the circumstances of the case so necessitate, any property of corresponding value of the criminal property, be forfeited to the State free from all encumbrances.”;
by the repeal of subsection (1a) of that section and the substitution therefor, of the following subsection:-
“(1a) Where such criminal property cannot be found or traced, the Court convicting such person shall order the convicted person or such other person referred to in subsection (1)
to pay to the State the corresponding value of such criminal property.”;
by the repeal of subsection (2) of that section and the substitution therefor, of the following subsection: -
“(2) The Court shall, before making an
Order of Forfeiture under subsection (1), determine on the balance of probabilities upon such inquiry as it may deem necessary, whether such order is likely to prejudice the rights of-
a bona fide purchaser for value of;
any other person who has acquired, for value, a bona fide interest in; or
a third party who has bona fide interest in, such criminal property.”;
by the insertion immediately after subsection (2) of that section, of the following new subsections: -
“(2a) Any person affected by an Order of Forfeiture made under subsection (1) may make an application for compensation to the
Court making such Order within a period of thirty days from the making of such Order stating that he has suffered a loss as a result of such Order.
Where an application is made under subsection (2a), the Court making the Order of Forfeiture may, subject to the provisions of subsection (3), upon being satisfied that the applicant has suffered a loss as a result of such
Order, order compensation to be paid to such person from the property forfeited.”; and
by the repeal of subsection (3) of that section and the substitution therefor, of the following subsection: -
“(3) An order made under subsection (1)
shall take effect –
where an appeal has been preferred to or pending before the Court having jurisdiction against the Order of
Forfeiture, upon the determination of such appeal confirming or upholding the Order of Forfeiture; or
where no appeal has been preferred to the Court having jurisdiction against the Order of Forfeiture within the period allowed therefor, after the expiration of the period within which an appeal may be preferred against such Order of Forfeiture.”.
s 16Amendment of section 14 of the principal enactment
Section 14 of the principal enactment is hereby amended as follows: -
by the repeal of subsection (1) of that section and the substitution therefor, of the following subsection: -
“(1) Any person who has neither committed nor concerned in any offence under this Act, and who owns, possesses, or has beneficial ownership in, or is in control of, any property which is subjected to the Freezing Order issued under section 7 may, within thirty days of the notice published under subsection (3) of section 8 apply to the Court which confirmed the Freezing Order, seeking the intervention of the Court to exclude from such Order any property he owns, possesses, has beneficial ownership in, or is in control of.”; and
in subsection (2) of that section-
by the substitution for the words “account, property or investment”, wherever those words appear in that subsection, of the words
“property subject to the Freezing Order”; and
in paragraph (a) of that subsection, by the substitution for the words “owns, possesses or is in control of,”, of the words “owns, possesses or has beneficial ownership in, or is in control of,”.
s 17Replacement of section 15 of the principal enactment
Section 15 of the principal enactment is hereby repealed and the following section is substituted therefor: -
15. Where any criminal property or property of corresponding value of the criminal property has been forfeited to the
State by an order made under section 13, the
Court may order that the said property be disposed of in accordance with the provisions of the Proceeds of Crime Act, No. 5 of 2025.”.
s 18Insertion of new sections 17a, 17b, 17c, 17d and 17e in the principal enactment
The following new sections are hereby inserted immediately after section 17 of the principal enactment and shall have effect as section 17a, section 17b, section 17c, section 17d and section 17e of that enactment: -
17a. A person who is subject to an investigation for an offence under section 3, shall furnish to a police officer not below the rank of an Assistant Superintendent of Police in charge of such investigation an affidavit or a sworn statement, describing the manner
“A person to furnish an affidavit or sworn statement to the police officer.
“Disposal of property upon forfeiture.
in which any suspected property acquired by such person has been derived or realised and providing answers to any question put to him by such police officer on the matters under investigation or any facts relevant to the matters under investigation:
Provided however, it shall not be an obligation for a person who is subject to an investigation for an offence under section 3, to furnish a self-incriminating or confessional statement or an affidavit or answer to any question, which would have a tendency to expose him to a criminal charge or to a penalty or forfeiture.
17b. Notwithstanding anything to the contrary in any other written law, an affidavit or a sworn statement furnished by any person to a police officer under section 17a shall be relevant and admissible in evidence at the trial in respect of such person for an offence under section 3:
Provided however, the provisions of the
Evidence Ordinance (Chapter 14) shall apply in respect of an affidavit or a sworn statement made by a person subject to an investigation while in the custody of, or in the presence of a police officer.
17c. (1) If any person giving evidence, at the trial for an offence under section 3, gives, in the opinion of the court before which the trial is being held, false evidence within the meaning of section 188 of the Penal Code
(Chapter 19), it shall be lawful for such court, upon
Admissibility of an affidavit and sworn statement.
Giving false evidence.
the conclusion of such trial, to arraign and to summarily try and sentence such witness for contempt of court to a fine not exceeding one million rupees or to imprisonment for a period not exceeding two years.
At any trial under subsection (1), it shall be sufficient to prove that such person has made contradictory statements and it shall not be necessary to prove which of such statements is false.
17d.
Special
Any police officer conducting an investigation under this Act may, in addition to the powers vested in such police officer by any other written law, use any investigation technique including the following in conducting the investigation: -
surveillance and observation;
undercover operations;
video recording;
using listening devices;
controlled deliveries; or
accessing computer data and computer systems.
A police officer not below the rank of an
Assistant Superintendent of Police may make an ex parte application in camera along with sufficient material to the Magistrate’s Court for an order for the purposes of paragraphs (c), (d), (e) and (f) of subsection (1).
A police officer not below the rank of an Assistant Superintendent of Police may make an application in writing to the investigation techniques to be used when conducting an investigation.
Magistrate for a warrant authorizing the covert monitoring of any conduct and recording of any communication if an officer conducting investigations under this Act has reasonable grounds to suspect or believe that a person has committed, or is committing or is about to commit an offence under this Act.
It shall be the duty of the officer making the application under subsection (2) to ensure the protection and preservation of information received or collected by the officer conducting the investigation.
17e.
team
If the circumstances of the case so justify, a joint investigation team may be established for a specific period by an agreement between the Sri Lanka Police and any other authority empowered to conduct investigations, in Sri Lanka or in any other jurisdiction, as may be determined by the Sri
Lanka Police for the purpose of conducting an investigation into-
an offence under section 3; or
an act alleged to have been committed in any jurisdiction outside
Sri Lanka which would either constitute an offence corresponding to the offence of money laundering in that jurisdiction or which would, if committed in Sri Lanka, amount to the offence of money laundering or an unlawful activity within the meaning of this Act.
Establishment of a joint investigation
Any evidence or material obtained during joint investigations may be used by competent courts, where the persons who were investigated are tried in such courts.”.
s 19Amendment of section 19 of the principal enactment
Section 19 of the principal enactment is hereby amended as follows: -
in subsection (1) of that section-
in paragraph (b) of that subsection, by the substitution for the words and figures “in subsection (1) of section 3,”, of the words and figures “in subsection (1) of section 5,” and for the words “on the directions of the Authority.”, of the words “on the directions of the Financial
Intelligence Unit;” and
by the addition immediately after paragraph (b) of that subsection, of the following new paragraph: -
“(c) against any Receiver, Special Manager or the Proceeds of Crime Management
Authority or any person carrying out any activity under the authority of a Receiver,
Special Manager or the Proceeds of
Crime Management Authority for any lawful act which in good faith is done or purported to be done by such Receiver,
Special Manager, the Proceeds of Crime
Management Authority or person in the performance of any duty imposed by this Act.”;
in subsection (2) of that section, by the substitution for the words “the Authority”, of the words “the
Financial Intelligence Unit”; and
by the repeal of the marginal note to that section and the substitution therefor, of the following marginal note: -
“Protection for action taken under this Act.”.
s 20Amendment of section 20 of the principal enactment
Section 20 of the principal enactment is hereby amended as follows: -
in subsection (2) of that section, by the substitution for the words “not exceeding fifty thousand rupees”, of the words “not exceeding five million rupees” and for the words “not exceeding one year”, of the words
“not exceeding three years”; and
in subsection (4) of that section, by the substitution for the words “not exceeding one hundred thousand rupees”, of the words “not exceeding five million rupees” and for the words “not exceeding twelve months”, of the words “not exceeding three years”.
s 21Insertion of new section 21 in the principal enactment
The following new section is hereby inserted immediately after section 20 of the principal enactment and shall have effect as section 21 of that enactment: -
21. For the purpose of effecting a conviction of a person or forfeiture of any criminal property or property of corresponding value of the criminal property, any information recorded in the course of any court proceedings relating to an offence under this Act or any decision or determination relating thereto, may be exchanged with any foreign law enforcement agency.”.
“Sharing of information of court proceedings.
s 22Replacement of section 22 of the principal enactment
Section 22 of the principal enactment is hereby repealed and the following section is substituted therefor: -
22. Where a request is made to the
Government of Sri Lanka by or on behalf of the Government of another country or foreign State and the Minister, in consultation with the Minister assigned the subject of
Foreign Affairs, considers it appropriate, either because an international arrangement so requires or permits, or in the interests of comity, he may order that the whole or any part of any criminal property or property of corresponding value of the criminal property forfeited under the provisions of this Act, or the value thereof, be transferred or remitted to such requesting country or foreign State:
Provided however, substantial or extraordinary costs incurred in enforcing the Order of Forfeiture, or in protecting, preserving or managing such property or on matters incidental thereto shall be deducted or recovered prior to transferring or remitting such property or value thereof to the requesting country or foreign State.”.
s 23Amendment of section 26 of the principal enactment
Section 26 of the principal enactment is hereby amended as follows: -
by the substitution for the words “requesting State”, of the words “requesting foreign State”; and
in the marginal note to that section, by the substitution for the words “requesting State”, of the words “requesting foreign State”.
“Sharing of forfeited property or value thereof.
s 24Replacement of section 27 of the principal enactment
Section 27 of the principal enactment is hereby repealed and the following section is substituted therefor: -
27. The provisions of the Mutual Assistance in Criminal Matters Act, No. 25 of 2002
shall be applicable in respect of providing of assistance as between the Government of
Sri Lanka and any foreign State or specified country or specified organisation in-
the investigation, prosecution, forfeiture or enforcement of orders, or any other legal proceedings in relation to the offence of money laundering or any unlawful activity;
and
any legal proceedings in relation to forfeiture of any criminal property or property of corresponding value of the criminal property.”.
s 25Amendment of section 28 of the principal enactment
Section 28 of the principal enactment is hereby amended as follows: -
in subsection (1) of that section, by the substitution for the word “State” wherever such word appears in that subsection, of the words “foreign State”; and
by the repeal of subsection (2) of that section.
s 26Amendment of section 29 of the principal enactment
Section 29 of the principal enactment is hereby amended as follows: -
“Providing assistance to foreign States etc.
by the substitution for the word “State” wherever such word appears in that section, of the words
“foreign State”; and
in the marginal note to that section, by the substitution for the words “other States”, of the words “other foreign States”.
s 27Amendment of section 30 of the principal enactment
Section 30 of the principal enactment is hereby amended as follows: -
in paragraph (a) of subsection (1) of that section, by the substitution for the words “the requesting State”, of the words “the requesting foreign State”; and
by the repeal of subsection (2) of that section.
s 28Amendment of section 31 of the principal enactment
Section 31 of the principal enactment is hereby amended by the substitution for the words “any other
State,”, of the words “any other foreign State,”.
s 29Amendment of section 32 of the principal enactment
Section 32 of the principal enactment is hereby amended as follows: -
by the substitution for the words “instituted in the
State against any person, in respect of an offence under the law of that State corresponding to the offence of money laundering.”, of the words
“instituted in that foreign State against any person either in respect of an offence under the law of` that foreign State corresponding to the offence of money laundering or proceedings in respect of forfeiture of criminal property.”; and
in the marginal note to that section, by the substitution for the words “other States.”, of the words “other foreign States.”.